Among the most common tax and housing policy questions we field here at NAHB is whether a 3.8% sales tax will hit home sales in 2013.
The answer is no.
Unfortunately, we’ve been tracking a set of emails that falsely claim that the 2010 health care reform legislation (which contained a burdensome 1099 reporting requirement, now repealed) imposed a 3.8% sales tax or transfer fee on all home sales in 2013. There is an element of fact underlying this rumor, but for the most part this claim is false.
The new tax added by the health care reform law is an add-on to existing taxes on capital gains and other “unearned income” (dividends, rents, and interest). The new 3.8% tax is often referred to as a Medicare tax because its revenues will be dedicated to the Medicare Trust Fund.
For capital gains, presently taxed at a 15% rate, the gains rate would…
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